¢14b spent on financial sector clean up – Ofori-Atta

The Finance Minister, Ken Ofori-Atta says government has already spent ¢14 billion to clean up the financial sector.

Speaking at the 56th annual session of the Ghana Baptist Convention in the Ashanti Region, the Minister said much of the money will go into paying disgruntled depositors.

“We are having to spend about 14 billion cedis to be able to give people’s monies back to them and make sure our banking crisis was contained.

“The expectation is that the receivers will move in strongly to recover these so that we can then begin to give them back to the bigger depositors,” he added.

The financial-sector cleanup has seen the number of lenders cut by almost a third to 23, savings and loans companies reduced to 25 from 40, finance houses to 11 from 19, and micro-finance and micro-credit lenders to 168, from 554.

The crackdown also triggered a run on fund managers, which have 4 billion cedis tied up in fixed-term investments with banks rescued during the cleanup, as well as savings and loans companies and microlenders. There is another 5 billion cedis locked up in illiquid hard-to-retrieve ventures such as unlisted bonds, direct private equity stakes and related party deals with small- to medium-sized companies.

A receiver has been selected to continue the clean-up processes and pay disgruntled depositors.

The Finance Minister has charged the receivers to go in strongly to retrieve good assets and funds invested in wrong ventures by financial institutions whose licenses have been revoked.

For a start, Mr Ofori-Atta revealed depositors with large sums of money will get a maximum of 10,000 Ghana Cedis. This he said is to ensure that “at least most people’s monies were not lost”.

Mr Ofori-Atta said investors also have the responsibility to consider the moral implications of their investment decisions.

He stressed the need for depositors to properly scrutinise the activities of the institutions invest with.

“Interrogating any suspiciously high returns and checking with regulators when we are unsure of the operations of an institution,” he admonished.

He said government will not relent on the transformational cleanup exercise.

“We had to start from somewhere and this is going to require a lot of patience because if the evil one sows the seed in our well-cultivated farm, we can’t cut it down until”.

Ghana Beyond Aid

The Minister as part of his speech reiterated government’s vision of a Ghana Beyond Aid in a long term and courted the supported of the church in achieving it.

Mr Ofori Attah says the vision is to rally Ghanaians to build a prosperous and self-confident Ghana that is in charge of her economic destiny.

“…a transformed Ghana that is prosperous enough to be beyond needing aid, and that engages competitively with the rest of the world through trade and investment.

“This will require hard work, enterprise, creativity, and a consistent fight against corruption in public and private life. It will also require that we break from a mentality of dependency and adopt a confident can-do spirit, fuelled by love for our dear country, Ghana.”

Mr Ofori Attah advised the church to eschew negativity as it prevents an individual or group from realising their potential of greatness.

“Ghana is a country that is destined for greatness, but the enemy’s plan is to divide us with lies, gossips, misrepresentations, greed and disagreements and worst of all a dangerous smear campaign calculated at tarnishing the image of well-meaning believers whose only desire is to see Ghana prosper.

“When we are caught up in this web of negativity it prevents us from realizing that potential of greatness. But I believe that these intercessory prayers in 1 Timothy 2:1-4 will help us attain the unity of purpose required to enable us achieve what is maybe considered by most as unachievable – Ghana Beyond Aid.”

Executive President of Ghana Baptist Convention, Rev Dr Ernest Adu Gyamfi, who also addressed the gathering called on government to clarify whether or not all depositors funds will be paid.

“There are conflicting reports that seem to suggest that there is no 100 percent guarantee that depositors of these savings and loans companies’ will get their monies back. Some people are also saying the monies will not be paid in bulk but will be spread for a period of three years.

“We would like the government and Bank of Ghana to clarify their positions so that genuine depositors of these institutions will know their true position so that they can plan accordingly”.

He also wants government to consider facilitating the early payment of these depositors and investors to ease the burden of families and individuals and restore confidence.